Correlation Between Exagen and W R

Can any of the company-specific risk be diversified away by investing in both Exagen and W R at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Exagen and W R into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exagen Inc and W R Berkley, you can compare the effects of market volatilities on Exagen and W R and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Exagen with a short position of W R. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exagen and W R.

Diversification Opportunities for Exagen and W R

-0.24

Correlation Coefficient

Exagen  W R

Very good diversification

The 3 months correlation between Exagen and WRB is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and W R Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W R Berkley and Exagen is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Exagen Inc are associated (or correlated) with W R. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W R Berkley has no effect on the direction of Exagen i.e., Exagen and W R go up and down completely randomly.

Pair Corralation between Exagen and W R

Considering the 90-day investment horizon Exagen Inc is expected to under-perform the W R. In addition to that, Exagen is 2.22 times more volatile than W R Berkley. It trades about -0.1 of its total potential returns per unit of risk. W R Berkley is currently generating about -0.01 per unit of volatility. If you would invest  7,889  in W R Berkley on March 31, 2024 and sell it today you would lose (31.00) from holding W R Berkley or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Exagen Inc  vs.  W R Berkley

Exagen Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

W R Berkley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days W R Berkley has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Exagen and W R

The main advantage of trading using opposite Exagen and W R positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exagen position performs unexpectedly, W R can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in W R will offset losses from the drop in W R's long position.

The idea behind Exagen Inc and W R Berkley pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.